About the Wholesale Electricity Market (WEM)

• The South West Interconnected System (SWIS) includes 7,750 km of transmission lines and 93,350km of distribution lines.
• The WEM supplies about 20 terawatt hours of electricity each year.
• A total WEM value of $1,615 million in 2021-22 financial year (including estimated values of $838 million in bilateral trades and $560 million in Reserve Capacity).
• There are more than one million customers in the WEM.
• 5,859MW of registered generation capacity, including 1,197MW of non-scheduled generation.

The Wholesale Electricity Market (WEM) for the South West Interconnected System of Western Australia (SWIS) commenced operation on 21 September 2006.

The WEM aims to facilitate competition and private investment and allow generators and wholesale purchasers of electricity (such as retailers) greater flexibility as to how they sell or procure electricity, and who they transact with.

AEMO is responsible for operating the WEM in accordance with the Wholesale Electricity Market Rules (WEM Rules) and the related WEM Procedures.

Other entities that play a role in the oversight and administration of the WEM are:

• The Minister for Energy, who established the initial WEM Rules, approves proposed changes to Protected Provisions in the WEM Rules and has the ability to make amending rules;
• The Coordinator of Energy, who undertakes the administration and decision-making functions for changes to the WEM Rules, and is the head of Energy Policy WA;
• Energy Policy WA, which provides a range of services on energy matters to the Minister for Energy, the Western Australian Government, the energy sector and the Western Australian community; 
• The Economic Regulation Authority, which performs regulatory and market surveillance roles and monitors and enforces compliance with the WEM Rules; and
• The Electricity Review Board which acts as an adjudicator for appeals.

All relevant contact details for the WA Functions and the Western Australian Market Reform Program can be found in the WEM Contacts and Subscriptions.

WEM Objectives

The objectives of the WEM are to:

• Promote the economically efficient, safe and reliable production and supply of electricity and electricity-related services in the SWIS.
• Encourage competition among generators and retailers in the SWIS, including by facilitating efficient entry of new competitors.
• Avoid discrimination in that market against particular energy options and technologies, including sustainable energy options and technologies such as those that make use of renewable resources or that reduce overall greenhouse gas emissions.
• Minimise the long-term cost of electricity supplied to customers from the SWIS.
• Encourage the taking of measures to manage the amount of electricity used and when it is used.

WEM Rules

The Coordinator of Energy is responsible for the administration and decision-making functions for changes to the WEM Rules.  

The following information regarding associated WEM Rule administration processes is available from the Energy Policy WA’s website:

• an overview of the rule change process and instructions for proposing a rule change;
• details and relevant documentation for all Rule Change Proposals that are under consideration or have been considered by the Coordinator of Energy, Rule Change Panel, or the Independent Market Operator (IMO); and
• various public reports related to consultations issued by the Coordinator of Energy, Rule Change Panel or the IMO.

WEM design

The WEM Rules, which establish the structure and processes that constitute the WEM, were developed by the Office of Energy (now known as Energy policy WA), with substantial support from a number of expert teams comprising industry and Government representatives.

The design for the WEM comprises a wholesale electricity trading component and a capacity component. The WEM Design Summary explains the current design in detail. 

As part of the Energy Transformation Strategy, extensive changes are being made to the WEM, many of which are planned to commence in October 2023.  AEMO is implementing these changes through the WEM Reform Program. An updated WEM Design Summary has been prepared to provide a high-level understanding of the new design.

AEMO is hosting the WEM Reformer, a dedicated site that includes a range of design documents relating to the new WEM. The Reformer is open to Rule Participants and entities supporting the implementation of the WEM Reform Program.  If you would like access to the Reformer, please contact wa.ets@aemo.com.au.